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The Union Cabinet on Wednesday, i.e., October 1, approved a 3 percent dearness allowance hike ahead of Diwali.
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Updated : Oct 01, 2025, 03:36 PM IST
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The Union Cabinet on Wednesday, i.e., October 1, approved a 3 percent dearness allowance hike ahead of Dussehra and Diwali. The hike will take effect from July 1, 2026. Notably, this will become the second DA hike this year. Previously, in March, the cabinet approved a 2 percent hike in the dearness allowance for central government employees, providing major relief to nearly 1.15 crore employees and pensioners.
The 2 percent hike was applied to the existing 53 percent of the basic pay to compensate employees for inflation. The March hike took the basic pay to 55 percent. Now, with a 3 percent hike in DA, the basic pay will go up to 58 percent.
Dearness Allowance (DA) is extra money that the public sector or government employees receive from their employers. It is calculated as a percentage of the basic salary. The DA is revised every six months on the basis of price rise. There are two types of DA - one for government employees and another for public sector staff.
Pertinent to note that DA is taxable and thus, it has to be mentioned in income tax filings.
